Congress let expire a program that helps students with financial needs pay for college

Flickr The US Senate declined to pass the Higher Education Act extension bill from the US House of Representatives Tuesday that would have extended the Perkins Loan program for an additional year, leading to the program's lapse at midnight.

The lapse means that new Perkins Loans can only be issued to existing recipients as of October 2014, putting a hold on issuance to students who are entering school or who have yet to use the financial aid.

The Perkins Loan program is a relatively small federal student-lending program that assists students in financial need. Created in 1958 as one of the first federal measures to help students afford college, Perkins Loans are distributed directly by the more than 1,700 colleges and universities that participate in the program to students with demonstrated financial need.

The loans are structured with many benefits to assist these students in managing the financial burden of borrowing to attend school.

Provisions include a fixed interest rate of 5% for the loan's life, interest waived while the student is in school, a nine-month grace period before repayment begins after enrollment ends, and special cancellation provisions for students who are employed in the military, certain health fields, or education.

Currently, there are 2.9 million Perkins Loan holders and roughly $8 billion outstanding. That makes for an average balance of $2,800, a fraction of the average $20,800 Direct Loan balance, the primary federal student-loan program used by 31 million people.

You would be forgiven for wondering what the fuss is about with the Perkins program, given its small footprint and relative contribution to current student-loan woes.

Critics of the program point to the outdated system of award size, and the overlap of this program and other facilities to help needy students afford school, like the Direct Loan Program and Pell Grants.

To adequately assist those who need it the most, a wind down of the Perkins program would need to include a corresponding increase in Pell Grants, which would lower the debt burden on needy students.

If this were the case, elimination of the Perkins program could make sense. Unfortunately, no such help is included in current proposals.

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Under current rules, a student who no longer can depend on the roughly $2,000 the loan would have provided will have to find that cash elsewhere, but a lack of financial resources is the singular reason people receive Perkins Loans in the first place.

If Congress is thoughtful about student-loan reform, they'll wind down the Perkins program but do so only after students who are at risk are appropriately supported in their educational pursuits.

Tapping the private market is not an option for these students, and it is in the country's best interest to provide support to these individuals in their pursuit of further education.